Carbon Border Adjustment Mechanism(CBAM):
The proposed changes to CBAM largely work to lessen the financial and administrative burden of CBAM certification requirements on importers. The proposal if adopted, would exempt 90% of importers included in CBAM, while covering 99% of total emissions.
Comparing EU ETS Allowance Closing Prices Based on Weekly v. Quarterly Averages:
The graph below compares EU ETS Allowance Closing Prices based on the current quarterly average calculation and the proposed weekly average. It is clear that this proposal would not have a large change in prices, though it would make the costs of carbon certificates more sensitive to market changes. This may lead to more uncertainty when approaching future costs for importers.
CBAM Certificate Cost Calculator:
This calculator estimates the cost of carbon certificates based on the weight of imports, emission factor, and EU ETS allowance prices. Use it to compare costs under the previous quarterly average pricing system versus the current weekly average pricing system. The equation to calculate the costs is below:
